Help us, Zardari to urge Friends of Pakistan

September 25th, 2008 - 1:15 pm ICT by IANS  

Islamabad, Sep 25 (IANS) President Asif Ali Zardari is to ask the US, Britain, Saudi Arabia and other major economic powers for pledging aid of up to $5 billion “to rescue Pakistan’s economy amid growing concerns of default on foreign debt obligations”, a media report Thursday said.The US administration, along with Britain and Pakistan, is co-hosting a Friends of Pakistan Conference in New York Friday “where Islamabad expects pledges of billions of dollars from G-8 and other countries to rescue its ailing economy as the foreign currency reserves deplete rapidly, touching the lowest of $8.467 billion on Sep 23″, The News said.

“The foreign currency reserves held by the State Bank of Pakistan fell below $5.006 billion and if forward liabilities are included, the real reserves are hovering around $3 billion, which cannot meet the import bill of one whole month,” it quoted official sources as saying.

Out of total reserves of $8.467 billion, the reserves held by the commercial banks stood at $3.461 billion on Sep 23. From Sep 22, the reserves fell by around $180 million since there were no receipts while the government made heavy payments for oil imports and for Haj operations.

Moody’s lowered Pakistan’s credit outlook to negative on Tuesday due to the risk of “missed repayments” on the nation’s debt.

“If Pakistan does not get the desired results from the Friends of Pakistan forum, bad days will be really knocking at the doors of the national economy,” The News quoted official sources as saying.

The falling reserves have put pressure on the rupee against the dollar as it has shed 24 percent in the last few months. This depreciation, coupled with the hike in inflation, “is playing havoc with the life of the common Pakistanis as purchasing power has eroded on a fast pace, something which was never witnessed in the history of the country”, The News said.

“Our short-term difficulties can be overcome if the Friends of Pakistan come forward by pledging dollar inflows even in shape of loans or the Saudi Oil Facility on deferred payments,” it quoted official sources as saying.

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